Following the move to take full control of Godrej Sara Lee through Godrej Consumer Products Ltd (GCPL), its flagship firm, the Godrej group has set itself a target to become the second-largest household insecticide company in the world.
Having acquired Megasari Makmur in Indonesia, and with the current buyout of the remaining 51 per cent Sara Lee stake in the Indian joint venture, the group has already become the second-largest household insecticide company in Asia, outside of Japan. Godrej’s household insecticides are exported to 20 countries, including Pakistan, Bangladesh, Nepal and Sri Lanka.
Now the group, according to A Mahendran, Director of its FMCG (fast moving consumer goods) cell, will use both the organic and inorganic route (that is, internal growth and acquisitions, respectively) to achieve this objective of becoming the global number two in the category.
Simultaneously, it is in the process of changing the name of Godrej Sara Lee. The names being considered include Godrej Household Care and Godrej Household Products, respectively.
Goodknight, the mosquito repellent brand, will be taken to rural areas in India as well as international markets. “That is something we propose to do aggressively,” he says.
Inorganically, it will continue to scout for opportunities in the category. For instance, its interest in the household insecticide business of Sara Lee, for which the group has placed a bid. “We are in the race for it. But, we are yet to hear from Sara Lee on this,” says Mahendran.
Sara Lee, over the past year, has been exiting non-core businesses to focus on its core food and beverage business. It has already sold its air-care business, which includes the Ambipur brand, to Procter & Gamble, and its personal care business, which includes Brylcreem, to Unilever. That leaves its shoe-care business, which has the Kiwi brand, non-Indian insecticides and a few non-European cleaning brands.
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According to Brenda Barnes, Sara Lee’s chairman and chief executive officer, the company continues to receive strong interest in these businesses from allied firms. Besides GCPL, the firms said to be in the race for Sara Lee’s household insecticide business include S C Johnson, the largest company in the segment in Asia, and Reckitt Benckiser.
This, says Mahendra, will not be the end of the road on acquisitions in the category, GCPL’s largest (according to analysts), followed by soaps and haircare. It is proposing buyouts in markets such as China, South America and Africa to expand its presence in the segment in these regions. It is also planning to expand its distribution network, and stay ahead of the curve on procurement of technology.